Time to give attention to accounts and tax returns
An article by Ian Kelly, Tax Partner – June 2020
As I write this column, the Prime Minister has just announced further relaxations of the lockdown.
So there are signs that life is going to start to return to what we hope to be some form of normality. With stability now, hopefully, replacing the recent turmoil now is the time to give attention to accounts and tax returns to ascertain forthcoming and projected liabilities, how to meet any deferred tax and VAT instalments and move business forward.
What lies ahead in the world of taxation?
At the time of the Budget in March, little did the new Chancellor Rishi Sunak know that he would soon have to introduce a raft of measures to support employers, employees and the self-employed as the economy took a huge hit.
The measures including the Job Retention Scheme (JRS); the Self-Employed Income Support Scheme (SEISS) and the deferment of any VAT payment due between 20 March and 30 June 2020 and the 31 July 2020 Self Assessment Payment on Account to March and January 2021 respectively led the way.
There were anomalies and controversy of course, but Mr Sunak has, rightly, earned plaudits for these initiatives that were introduced with impressive speed. He now needs to turn his attention to scaling them back and working out how to clawback the massive spend without a return to austerity.
We already know there will be an Autumn Statement (a Budget part two?) but what might find its way into it?
An increase in each of the 20%, 40% and 45% tax rates seems a formality. This might make the payment of any significant bonuses or dividends sooner rather than later attractive.
Higher rate pension relief is a habitual certainty for abolition and is sure to be rumoured to be in the mix again. Given the desire to promote pension provision, will this continue to be encouraged through no change or might there by a hybrid tax relief rate of 30% to appeal to basic and higher rate taxpayers alike?
An attempt to revolutionise the field of self-employed National Insurance Contributions by then Chancellor Philip Hammond was subject to a hasty u-turn but might the current man in number 11 revisit this topic and align thresholds and rates for the self-employed with the employed?
What might the future hold for the likes of Corporation Tax, Capital Gains Tax, Inheritance Tax, Stamp Duty Land Tax and VAT? Mr Sunak has already taken a swipe at what he perceived to be an over-generous Entrepreneurs Relief.
We will of course keep our clients informed as and when any new information on the above is available. In the meantime, if you’re turning your attention to accounts and tax returns please don’t hesiate to ask for our help.
We’re on 01642 606003.